Overconfidence and risk perceptions

do they really matter for venture creation decisions?

Anthony Trey Robinson, Louis D. Marino

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

A cognitive approach for explaining venture creation decisions offers great insights into entrepreneurship research. Examining venture creation decisions from a perspective that considers the cognitive states and perceptions of entrepreneurs further informs the critical role of cognitive constructs in entrepreneurial decision-making. This study provides empirical evidence for a theory of overconfidence that explains why some choose to become entrepreneurs. It explores the interconnections between overconfidence, risk perceptions, and venture creation decisions. More specifically, the growing importance of overconfidence in entrepreneurship encourages an examination of its association with venture creation decisions. Additionally, this research seeks to establish risk perceptions as a mediator for that relationship. Examining these relationships through a psychological perspective contributes to a growing body of entrepreneurial cognition research. This study makes a contribution by providing substantiation for the relationship between overconfidence and venture creation decisions. Equally important, the empirical evidence in this study is the first to provide support for the partially mediating role of risk perceptions. The findings presented here help to provide some insights into understanding why entrepreneurs tend to be more overconfident than non-entrepreneurs, particularly, since overconfidence is positively associated with the decision to start a new venture.

Original languageEnglish (US)
Pages (from-to)149-168
Number of pages20
JournalInternational Entrepreneurship and Management Journal
Volume11
Issue number1
DOIs
StatePublished - Jan 1 2013

Fingerprint

Risk perception
Decision making
Overconfidence
Venture creation
Entrepreneurs

Keywords

  • Cognitive biases
  • Entrepreneurs
  • Overconfidence
  • Risk perceptions
  • Venture creation

ASJC Scopus subject areas

  • Management Information Systems
  • Management of Technology and Innovation

Cite this

Overconfidence and risk perceptions : do they really matter for venture creation decisions? / Robinson, Anthony Trey; Marino, Louis D.

In: International Entrepreneurship and Management Journal, Vol. 11, No. 1, 01.01.2013, p. 149-168.

Research output: Contribution to journalArticle

@article{91ebe25e71874ad986fae85bfdc13cc2,
title = "Overconfidence and risk perceptions: do they really matter for venture creation decisions?",
abstract = "A cognitive approach for explaining venture creation decisions offers great insights into entrepreneurship research. Examining venture creation decisions from a perspective that considers the cognitive states and perceptions of entrepreneurs further informs the critical role of cognitive constructs in entrepreneurial decision-making. This study provides empirical evidence for a theory of overconfidence that explains why some choose to become entrepreneurs. It explores the interconnections between overconfidence, risk perceptions, and venture creation decisions. More specifically, the growing importance of overconfidence in entrepreneurship encourages an examination of its association with venture creation decisions. Additionally, this research seeks to establish risk perceptions as a mediator for that relationship. Examining these relationships through a psychological perspective contributes to a growing body of entrepreneurial cognition research. This study makes a contribution by providing substantiation for the relationship between overconfidence and venture creation decisions. Equally important, the empirical evidence in this study is the first to provide support for the partially mediating role of risk perceptions. The findings presented here help to provide some insights into understanding why entrepreneurs tend to be more overconfident than non-entrepreneurs, particularly, since overconfidence is positively associated with the decision to start a new venture.",
keywords = "Cognitive biases, Entrepreneurs, Overconfidence, Risk perceptions, Venture creation",
author = "Robinson, {Anthony Trey} and Marino, {Louis D.}",
year = "2013",
month = "1",
day = "1",
doi = "10.1007/s11365-013-0277-0",
language = "English (US)",
volume = "11",
pages = "149--168",
journal = "International Entrepreneurship and Management Journal",
issn = "1554-7191",
publisher = "Springer New York",
number = "1",

}

TY - JOUR

T1 - Overconfidence and risk perceptions

T2 - do they really matter for venture creation decisions?

AU - Robinson, Anthony Trey

AU - Marino, Louis D.

PY - 2013/1/1

Y1 - 2013/1/1

N2 - A cognitive approach for explaining venture creation decisions offers great insights into entrepreneurship research. Examining venture creation decisions from a perspective that considers the cognitive states and perceptions of entrepreneurs further informs the critical role of cognitive constructs in entrepreneurial decision-making. This study provides empirical evidence for a theory of overconfidence that explains why some choose to become entrepreneurs. It explores the interconnections between overconfidence, risk perceptions, and venture creation decisions. More specifically, the growing importance of overconfidence in entrepreneurship encourages an examination of its association with venture creation decisions. Additionally, this research seeks to establish risk perceptions as a mediator for that relationship. Examining these relationships through a psychological perspective contributes to a growing body of entrepreneurial cognition research. This study makes a contribution by providing substantiation for the relationship between overconfidence and venture creation decisions. Equally important, the empirical evidence in this study is the first to provide support for the partially mediating role of risk perceptions. The findings presented here help to provide some insights into understanding why entrepreneurs tend to be more overconfident than non-entrepreneurs, particularly, since overconfidence is positively associated with the decision to start a new venture.

AB - A cognitive approach for explaining venture creation decisions offers great insights into entrepreneurship research. Examining venture creation decisions from a perspective that considers the cognitive states and perceptions of entrepreneurs further informs the critical role of cognitive constructs in entrepreneurial decision-making. This study provides empirical evidence for a theory of overconfidence that explains why some choose to become entrepreneurs. It explores the interconnections between overconfidence, risk perceptions, and venture creation decisions. More specifically, the growing importance of overconfidence in entrepreneurship encourages an examination of its association with venture creation decisions. Additionally, this research seeks to establish risk perceptions as a mediator for that relationship. Examining these relationships through a psychological perspective contributes to a growing body of entrepreneurial cognition research. This study makes a contribution by providing substantiation for the relationship between overconfidence and venture creation decisions. Equally important, the empirical evidence in this study is the first to provide support for the partially mediating role of risk perceptions. The findings presented here help to provide some insights into understanding why entrepreneurs tend to be more overconfident than non-entrepreneurs, particularly, since overconfidence is positively associated with the decision to start a new venture.

KW - Cognitive biases

KW - Entrepreneurs

KW - Overconfidence

KW - Risk perceptions

KW - Venture creation

UR - http://www.scopus.com/inward/record.url?scp=84922377171&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84922377171&partnerID=8YFLogxK

U2 - 10.1007/s11365-013-0277-0

DO - 10.1007/s11365-013-0277-0

M3 - Article

VL - 11

SP - 149

EP - 168

JO - International Entrepreneurship and Management Journal

JF - International Entrepreneurship and Management Journal

SN - 1554-7191

IS - 1

ER -